Anhui Transport Consulting & Design Institute Co.,Ltd.'s (SHSE:603357) Share Price Boosted 30% But Its Business Prospects Need A Lift Too
Anhui Transport Consulting & Design Institute Co.,Ltd.'s (SHSE:603357) Share Price Boosted 30% But Its Business Prospects Need A Lift Too
The Anhui Transport Consulting & Design Institute Co.,Ltd. (SHSE:603357) share price has done very well over the last month, posting an excellent gain of 30%. Taking a wider view, although not as strong as the last month, the full year gain of 22% is also fairly reasonable.
Even after such a large jump in price, Anhui Transport Consulting & Design InstituteLtd may still be sending very bullish signals at the moment with its price-to-earnings (or "P/E") ratio of 13.5x, since almost half of all companies in China have P/E ratios greater than 30x and even P/E's higher than 55x are not unusual. However, the P/E might be quite low for a reason and it requires further investigation to determine if it's justified.
Anhui Transport Consulting & Design InstituteLtd certainly has been doing a good job lately as it's been growing earnings more than most other companies. One possibility is that the P/E is low because investors think this strong earnings performance might be less impressive moving forward. If not, then existing shareholders have reason to be quite optimistic about the future direction of the share price.
If you'd like to see what analysts are forecasting going forward, you should check out our free report on Anhui Transport Consulting & Design InstituteLtd.What Are Growth Metrics Telling Us About The Low P/E?
There's an inherent assumption that a company should far underperform the market for P/E ratios like Anhui Transport Consulting & Design InstituteLtd's to be considered reasonable.
Taking a look back first, we see that the company managed to grow earnings per share by a handy 11% last year. The latest three year period has also seen an excellent 31% overall rise in EPS, aided somewhat by its short-term performance. So we can start by confirming that the company has done a great job of growing earnings over that time.
Looking ahead now, EPS is anticipated to climb by 13% per year during the coming three years according to the three analysts following the company. With the market predicted to deliver 21% growth per year, the company is positioned for a weaker earnings result.
In light of this, it's understandable that Anhui Transport Consulting & Design InstituteLtd's P/E sits below the majority of other companies. It seems most investors are expecting to see limited future growth and are only willing to pay a reduced amount for the stock.
The Key Takeaway
Shares in Anhui Transport Consulting & Design InstituteLtd are going to need a lot more upward momentum to get the company's P/E out of its slump. Using the price-to-earnings ratio alone to determine if you should sell your stock isn't sensible, however it can be a practical guide to the company's future prospects.
We've established that Anhui Transport Consulting & Design InstituteLtd maintains its low P/E on the weakness of its forecast growth being lower than the wider market, as expected. At this stage investors feel the potential for an improvement in earnings isn't great enough to justify a higher P/E ratio. It's hard to see the share price rising strongly in the near future under these circumstances.
And what about other risks? Every company has them, and we've spotted 1 warning sign for Anhui Transport Consulting & Design InstituteLtd you should know about.
You might be able to find a better investment than Anhui Transport Consulting & Design InstituteLtd. If you want a selection of possible candidates, check out this free list of interesting companies that trade on a low P/E (but have proven they can grow earnings).
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
安徽省交通諮詢設計研究院有限公司, Ltd.(上海證券交易所代碼:603357)的股價在上個月表現良好,漲幅爲30%。從更廣泛的角度來看,儘管沒有上個月那麼強勁,但全年22%的漲幅也相當合理。
即使在價格大幅上漲之後,安徽交通諮詢設計研究院有限公司目前仍可能以13.5倍的市盈率(或 “市盈率”)發出非常看漲的信號,因爲中國幾乎有一半公司的市盈率超過30倍,甚至市盈率高於55倍也並不罕見。但是,市盈率可能很低是有原因的,需要進一步調查以確定其是否合理。
安徽交通諮詢設計研究院有限公司最近確實做得很好,因爲它的收益增長幅度超過了大多數其他公司。一種可能性是市盈率很低,因爲投資者認爲這種強勁的盈利表現今後可能不那麼令人印象深刻。如果不是,那麼現有股東就有理由對股價的未來走向非常樂觀。
如果你想了解分析師對未來的預測,你應該查看我們關於安徽交通諮詢設計研究院有限公司的免費報告。關於低市盈率,增長指標告訴我們什麼?
人們固有的假設是,如果像安徽交通諮詢設計研究院這樣的市盈率才算合理,公司的表現應該遠遠低於市場。
首先回顧一下,我們發現該公司去年成功地將每股收益增長了11%。在最近三年中,每股收益總體增長了31%,這在一定程度上得益於其短期表現。因此,我們可以首先確認該公司在這段時間內在增加收益方面做得很好。
根據關注該公司的三位分析師的說法,展望未來,預計未來三年每股收益將每年增長13%。預計市場每年將實現21%的增長,因此該公司的盈利業績將疲軟。
有鑑於此,可以理解安徽交通諮詢設計研究院有限公司的市盈率低於其他大多數公司。看來大多數投資者預計未來增長有限,只願意爲股票支付較少的金額。
關鍵要點
安徽交通諮詢設計研究院有限公司的股價將需要更多的上漲勢頭才能使該公司的市盈率擺脫低迷。僅使用市盈率來確定是否應該出售股票是不明智的,但它可以作爲公司未來前景的實用指南。
我們已經確定,安徽交通諮詢設計研究院有限公司維持較低的市盈率,原因是其預期的增長低於整個市場,其市盈率不如預期。在現階段,投資者認爲,收益改善的可能性不足以證明更高的市盈率是合理的。在這種情況下,很難看到股價在不久的將來強勁上漲。
那其他風險呢?每家公司都有它們,我們發現了你應該知道的安徽省交通諮詢設計研究院有限公司的1個警告標誌。
你也許能找到比安徽交通諮詢設計研究院有限公司更好的投資。如果你想選擇可能的候選人,可以免費查看這份有趣的公司名單,這些公司的市盈率很低(但已經證明可以增加收益)。
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Simply Wall St的這篇文章本質上是籠統的。我們僅使用公正的方法根據歷史數據和分析師的預測提供評論,我們的文章無意作爲財務建議。它不構成買入或賣出任何股票的建議,也沒有考慮到您的目標或財務狀況。我們的目標是爲您提供由基本數據驅動的長期重點分析。請注意,我們的分析可能不考慮最新的價格敏感型公司公告或定性材料。簡而言之,華爾街沒有持有任何上述股票的頭寸。
譯文內容由第三人軟體翻譯。
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